Aluminum Spreads Hit 15

Rolls of sheet aluminum in a storage area.

Spot aluminum prices have been trading at the biggest discount to futures on the London Metal Exchange since the global financial crisis, as weak demand for one of the most widely used industrial commodities reignites fears of a glut of unwanted Russian metal.

The aluminum market is coming under pressure from a sharp downturn in demand, combined with a rebound in supply in top producer China and high interest rates that make it more expensive for traders to hold inventories. The mounting weakness means that traders and executives are bracing for excess stocks to hit the market — a situation made more complicated because much of the metal that’s piling up in warehouses is Russian, largely a result of “self sanctioning” by consumers and banks in the US and Europe.